As a healthcare provider who actively handles medical billing, you may be familiar with entity codes. If this sounds like a new term, then you must read this blog to find out what entity code is in medical billing!
Just like CPT and ICD-10 codes, entity codes play a vital role in achieving adequate revenue. The scope of entity codes is directly related to accurate and timely reimbursement.
This blog is your guide to entity codes, their importance, usage, and tips to avoid errors related to them. Continue reading to learn this concept for effective revenue cycle management.
Defining Entity Codes: Understanding the Basics
We can say that an entity code is a unique identification number to define the participants of a healthcare service. It classifies and distinguishes the healthcare provider, patient and insurance provider.
An entity code is also known as National Provider Identifier (NPI), and it operates within the guidelines of the Centers for Medicare and Medicaid Services (CMS).
The Term Entity and Different Identifiers
Before NPI, the entity code was known as Provider Identification Number (PIN) and this name was used until 2007. Entity code or NPI is a standard reference used by medical billing programs such as Medicare and Medicaid. Apart from that, private insurance providers use these identifiers to distinguish.
NPI (National Provider Identifier)
This type of code belongs to the one who renders medical services. NPI is for both physicians and healthcare facilities including clinics and hospitals. This 10-digit number helps in recognizing the healthcare provider for medical billing.
When it comes to insurance provider, the unique identifier changes to two types, namely Payer ID and Carrier Code.
Payer ID
This is the unique identifier for the insurance company, or any other insurance payer involved in the process. This ID helps claims reach the right insurance provider.
Carrier Code
In case the insurance policy of a patient is handled by an insurance carrier, this code is used for identification. The purpose of this code remains the same as the Payer ID.
Another important code in this process is TIN (Tax Identification Number). This acts as an entity code as it fulfills the tax purpose. This is also meant for insurance providers, and it is a 9-digit number.
These codes aim for accurate identification of all parties involved in a single medical service. This representation is crucial to ensure efficient claim processing and adequate reimbursement. The code is supposed to eliminate confusion during medical billing.
Let’s go through an example to understand entity codes better!
For Instance,
When a patient visits a healthcare practice for a consultation, after rendering medical services the next step is medical billing.
During the medical billing process, the healthcare provider is an entity, and the insurance provider of that patient is an entity. Both these parties have separate entity codes.
If the healthcare provider’s entity code is ‘23456’, it must be mentioned in the medical claims. On the other hand, if the insurance provider’s entity code is ‘12345’, it must be a part of the medical claim as well.
As this claim reaches processing, the insurance provider immediately identifies if that claim belongs to the company and finds out if that healthcare provider exists in their insurance circle.
This way the process is streamlined, and the chances of errors are reduced helping healthcare providers in receiving adequate revenue.
The Role of Entity Code in Medical Billing
The above example explains that different parts of a medical claim are known as an entity. These entities are a vital part of the medical billing process and help healthcare providers acquire complete reimbursement.
Entity codes give an independent identification to healthcare providers and insurance companies. This has numerous benefits to a healthcare provider or practice. Making sure entity codes are utilized accurately is a way to improve claim processing.
Healthcare Providers can attain three things if they incorporate entity codes effectively and they are:
Flawless Claim Processing
Entity codes are a sign of eligibility for healthcare providers leading to accelerated claim processing and comprehensive payment.
Adherence to Compliance
The purpose of entity codes is not limited to identification, they certainly help with compliance. Under HIPAA, mentioning the standard identifier which is NPI is crucial.
Better Integration
Entity codes foster coordination between healthcare providers and insurance companies easing the process and simplifying medical billing.
However, the role of entity codes is not limited to just identifying different partners. It allows insurance companies to recognize medical services and the provider of those services.
Entity codes are significant to medical billing and revenue cycle management. However, it is not as simple as just mentioning the codes and forgetting about the result. Errors do occur while drafting claims for submission.
Entity Code Errors Stopping You from Attaining Optimum Medical Billing
Inaccurate Entity Codes
Whether it is NPI, Payer ID or TIN, inaccuracies will lead to faulty claim processing and inadequate revenue. The direct impact of wrong entity codes is claim denials or rejections. This results in reimbursement delays and deterioration in the bottom line.
Keeping entity codes accurate is crucial to eliminating revenue loss and maximizing the revenue cycle. Healthcare providers must cross-check claims to ensure the accuracy of NPIs and Payer IDs.
Inability to Stay Current
These entity codes are subject to change and the new status must be reflected in the claims at all times. Healthcare providers' inability to keep themselves updated can be a challenge in achieving optimum claim processing.
There is a need to update entity codes regularly in healthcare practice to avoid such errors and losses.
Incomplete or Ambiguous Codes
Missing out on important entity codes while claim filing is as damaging as writing the wrong codes. It is also easy to misinterpret and get confused with various entity codes and make a mistake.
Healthcare providers must highlight the significance of accurate and appropriate entity codes and educate the same to the medical billing staff. Otherwise, healthcare providers can partner with a medical billing company to deal with coding efficiently.
Medical billing services manage the entire process and reduce errors to prevent the healthcare practice from claim denials. They are informed about medical billing processes and handle all entity code requirements.
Eminence RCM for Entity Code Efficiency
Entity code in medical billing is a time-consuming and stressful process. Also, the chances of errors are higher. Whatever the situation may be, healthcare providers are always on the receiving end of revenue leakages.
Medical billing services are always an ideal option for healthcare providers. Such professionals take care of medical billing comprehensively and ensure adequate revenue.
Partner with Eminence RCM and get accurate entity codes every time!
Eminence RCM efficiently handles your medical billing process and ensures accurate entity codes. We understand the hassle of coding and provide efficient RCM solutions to eliminate intricacies and achieve optimum results.
Our team aims to recognize the weak areas of your medical billing process and solve the issues from the root cause. We ensure accurate entity codes, CPT and ICD-10 codes. Other than that, we streamline all steps of medical billing to improve your operational flow.
Compliance is never an issue for Eminence RCM, as we adhere to all regulatory standards and protect your practice from legal consequences. All in all, choosing us for outsourcing is an absolute solution for your healthcare practice!
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